Fund Manager Summary on Lottery Corporation Ltd (ASX:TLC)
In February 2026, Pendal Group commented that Lottery Corp (TLC) delivered a slight beat despite prior poor jackpot luck, the new CEO highlighted opportunities from increased digital penetration and new product offers, and the stock trades at about 29x PE reflecting its infrastructure-like profile. Across fund manager commentary the consensus is that Lottery Corporation Ltd (ASX:TLC) remains a high‑quality, monopoly lottery operator with strong cash generation, pricing power and structural digital tailwinds, but its earnings and share price are materially affected by jackpot luck and hinge on regulatory outcomes and licence renewals; managers note actionable positives including cost control post‑demerger, operating leverage, product innovation and a 17% Powerball price rise that should support second‑half earnings, plus scope for capital management once the Victorian licence is secured, while risks include continued jackpot variance (which drove ~12% quarterly underperformance in one report), a premium valuation (cited around mid‑20s to 29x PE), and sensitivity to licence terms and regulatory scrutiny, so investors should weigh durable monopoly economics and digital growth against near‑term earnings volatility and the timetable/terms for licence renewals when assessing TLC.
Commentary From The Managers
There are 7 insights from 6 fund managers regarding their investment in Lottery Corporation Ltd (ASX:TLC) available on Thesis Tracker.
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Updates are made available to members within 12 hours of being released. The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Perpetual Asset Management
6 Mar 2026
$5.43
Summary
- Perpetual Asset Management increased their position in Lottery Corporation Ltd because it operates a near-monopoly lottery business with long-dated, high-quality concessions.
- The lottery category has shown solid long-term growth despite periodic jackpot volatility.
- TLC holds a near-monopoly in Australian lotteries backed by long-dated concessions, providing high earnings predictability.
- Perpetual views the risk/reward as highly attractive given the structural moat and visible earnings growth trajectory.
Plato Investment Management
6 Mar 2026
$5.43
Summary
- Plato Investment Management increased their position in Lottery Corporation Ltd because strong Keno performance demonstrates resilience even in a tough jackpot period.
- Despite a below-average jackpot period in the main lottery business, Keno delivered strong results, highlighting earnings diversity.
- Plato sees the structural moat of lottery concessions as highly valuable and difficult to replicate.
- The current share price is seen as a compelling entry point relative to the long-term earnings potential of the business.
Pendal Group
23 Feb 2026
$5.51
Summary
- Pendal Group believes Lottery Corporation remains a resilient, infrastructure-style business and continues to hold because 1H26 results marginally beat expectations, management set a constructive outlook and digital/product initiatives support medium-term growth despite near-term jackpot volatility.
- Operational beat: 1H26 delivered a slight beat versus fears of an earnings miss after a period of record bad luck on jackpots.
- Market reaction: Share price rose +8.6% after the result; the stock had been weak over the prior four months.
- Analyst forecasts: Despite jackpot variance, market earnings forecasts remained broadly unchanged.
- Management: New CEO presented a positive outlook and highlighted opportunities from increased digital penetration and new product offers.
- Valuation: Trades at ~29x PE, reflecting its infrastructure characteristics but only moderate growth expectations.
- Relative preference: Other defensive stocks (eg, TLS) are viewed as more attractive on a risk/return basis.
Investors Mutual Limited
31 Dec 2025
$5.16
Summary
- Investors Mutual Limited believes the recent sell-off is a short-term market reaction and continues to hold because TLC's high-quality monopoly lottery licences, potential for margin improvement via gaming innovation and rising online adoption, and recent pricing moves support long-term defensive growth.
- Underperformance: TLC fell ~12% over the quarter, driven mainly by a poor run of large jackpots that lowered near-term market earnings estimates.
- Fundamentals unchanged: the core investment case remains intact—stable, long-term growth from monopoly licences combined with recurring cash generation.
- Margin upside: ongoing gaming innovation and increased online adoption are expected to lift margins over time.
- Price support: the 17% Powerball price increase in November should bolster second-half earnings.
- Capital management potential: there is scope for additional capital returns once the Victorian licence extension is secured.
Alliance Bernstein
30 Sept 2025
$5.88
Summary
- Alliance Bernstein initiated a position in The Lottery Corporation due to its stability.
- The fund manager is drawn to the company's strong cash flow generation.
- Investment reflects a belief in the reliability of lottery revenues.
- Alliance Bernstein sees potential for long-term growth in the lottery sector.
- The fund manager appreciates the defensive nature of lottery investments.
Blackwattle Investment Partners
30 Apr 2025
$5.22
Summary
- TLC was a significant contributor to performance in April, rallying 10% as investors sought defensive growth in uncertain economic conditions.
- TLC operates as the monopoly lottery operator for state lottery concessions in Australia, excluding Western Australia.
- Since being spun out of Tabcorp in 2022, TLC has been somewhat overlooked in the ASX, gaining attention primarily during record-breaking jackpots.
- The stock faced challenges due to a poor streak of jackpot luck, trading at mid 20s PE multiple for FY26 despite being a high-quality defensive compounder.
- Blackwattle Investment Partners continues to see significant upside for TLC as an enduring high-quality business.
- TLC is viewed as one of the highest quality franchises on the ASX, characterized by its defensive nature, monopoly status, pricing power, product innovation, and strong cash generation.
- The company benefits from structural digital tailwinds and capital optionality, enhancing its growth potential.
Equity Trustees Asset Management
31 Mar 2025
$4.76
Summary
- The Lottery Corporation was spun out of Tabcorp in 2022, with roots dating back to 1881.
- It operates lotteries across all states except WA and also manages Keno.
- Post-demerger, TLC has greater control over its cost base, which enhances revenue stability.
- This structure allows for operational leverage and the potential for increased revenue if the Victorian lottery license is renewed on more favorable terms.
- The stock's recent underperformance is attributed to less favorable jackpot outcomes, which are expected to normalize.
- Ongoing game changes are projected to drive additional revenue growth in the future.
Blackwattle Investment Partners
31 July 2024
$4.97
Summary
- Blackwattle Investment Partners continues to hold Lottery Corporation Ltd (TLC.AX) despite recent underperformance.
- The fund's positions in Consumer Discretionary detracted from overall performance, primarily due to stock selection within the sector.
- An overweight position in The Lottery Corporation underperformed compared to cyclical consumer peers and the broader market.
- Despite being a discretionary stock, its revenues are characterized as defensive and stable.
- Blackwattle remains confident in Lottery Corporation due to the resilience of its sales through various economic conditions.
- The firm's investment thesis is bolstered by expectations of long-term margin improvement as it increases online penetration.
- Continued game enhancements are anticipated to drive larger jackpots and enhance consumer interest.
Cooper Investors
30 Sept 2023
$4.65
Summary
- Cooper Investors built a position in The Lottery Corporation (TLC) during the September quarter.
- TLC falls within the Stalwart Subset of Value, indicating a defensive business model.
- Expectations for reasonable earnings growth are based on moderate top line growth driven by population growth and product innovation.
- Potential for margin expansion exists through improved product mix and operating leverage.
- Earnings may experience volatility in the short term, influenced by jackpot sequences.
- Long-term returns from TLC are anticipated to be consistent.
- The company's strong market position is a significant attraction for this investment.
- Lotteries exhibit infrastructure-like characteristics and have a lower capital intensity compared to other infrastructure opportunities.
- There is potential for further value creation through product innovation and new or expanded lottery licenses in Australia and potentially New Zealand.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
Frequently Asked Questions
Who is investing in Lottery Corporation Ltd (ASX:TLC)?
Fund managers including Cooper Investors, Blackwattle Investment Partners, Equity Trustees Asset Management, Alliance Bernstein, Investors Mutual Limited and Pendal Group have invested in Lottery Corporation Ltd (ASX:TLC).
Why do fund managers invest in Lottery Corporation Ltd?
Fund managers invest in Lottery Corporation Ltd due to its strong market position as the monopoly operator of Australian state lotteries, minus Western Australia. The company has a stable and high-quality revenue stream, enhanced by cost control post-demerger from Tabcorp. Investors note its potential for growth through favorable licensing terms and product innovation. Despite recent underperformance due to jackpot luck, its defensive nature and solid cash flow generation make it an attractive option in uncertain economic conditions.
What happened to Lottery Corporation Ltd (ASX:TLC)?
Fund managers, including Alliance Bernstein, are investing in Lottery Corporation Ltd due to its stability and strong cash flow generation, making it an attractive addition to their portfolios.
What is the short interest in Lottery Corporation Ltd (ASX:TLC)?
The short interest in Lottery Corporation Ltd (ASX:TLC) is 1.03% which makes it the 207th most shorted stock on the ASX. Of the 2.2B shares that Lottery Corporation Ltd has on issue, 22.9M have been sold short.
What does Lottery Corporation Ltd (ASX:TLC) do?
The Lottery Corp. Ltd. engages in the provision of gaming and entertainment services. It operates through the Lotteries and Keno segments. The company was founded in 1881 and is headquartered in Brisbane, Australia.